Utah AG Files Lawsuit Against Kalshi Over Sports Markets

Lawsuits continue to pile up against Kalshi.

Utah Attorney General Derek Brown has filed a lawsuit against Kalshi over its sports prediction markets. The lawsuit claims the “trades” on these markets were no different from sports betting and therefore violate the state’s ban on gambling. It also reveals that they found 55,819 Kalshi accounts tied to Utah addresses that have contributed up to $60 million in fees.

“Those Utahns aren’t hard to find. Kalshi’s own court filing counted 55,819 accounts tied to Utah addresses,” AG Brown shared on LinkedIn. “We estimate the company has collected $30 million to $61 million in fees from those accounts. Nationally, ordinary users have lost more than $583 million on the platform since 2021, according to one independent analysis.”

Kalshi continues to assert that the Commodity Exchange Act protects its sports markets. This puts them under federal regulation by the Commodity Futures Trading Commission, meaning Utah and other states can’t enforce their gambling laws.

In a statement to KSL News, Kalshi echoed this sentiment in response to Utah’s lawsuit.

"Kalshi is a federally regulated financial exchange, like the stock market. Our customers trade with each other and set the prices. As a national derivatives market overseen by the Commodity Futures Trading Commission, Kalshi answers to federal law, and no single state should have a veto over it," the statement read.

Kalshi Already Lost in Utah

In February, Kalshi filed a preemptive lawsuit against Utah after the state demanded it halt all sports markets in the state. It claimed that AG Brown refused to return Kalshi’s inquiries about potential legal action. As a result, it sought an injunction to prevent any future action.

The lawsuit ultimately failed, and the court rejected Kalshi’s arguments. 

“You can’t rebrand illegal gambling as a federal commodity, and today a federal judge agreed with us. Kalshi bet that clever branding would beat Utah law. Kalshi lost, and Utah won,” AG Brown shared in a statement. “Utah’s constitution bans gambling to protect Utah families, and my office will enforce that ban. Gambling is gambling no matter what any company calls it.”

With that ruling in hand, Utah feels confident its lawsuit will force Kalshi’s sports prediction markets to shut down.